On September 29, 2010, Walker announced he would retire at the end of 2010 and return to private practice.[7] He retired at the end of February 2011. On April 6, 2011, Walker told reporters that he is gay and has been in a relationship with a male doctor for about ten years.[8] He was the first known gay person to serve as a United States federal judge,[9] though he did not publicly confirm his sexual orientation until after retiring from the federal bench.[10]

Since retiring from the bench, he has operated a private practice in San Francisco focusing on arbitration and mediation services,[11] as well as lecturing at Stanford University Law School and the University of California, Berkeley School of Law.[12]

Walker has been called an "unorthodox" and "independent-minded conservative" judge; he has called for policies including the auctioning of lead counsel status in securities class action suits and the legalization of drugs.[4] In a 2003 case, United States v. Gementera, as a condition of supervised release, Walker required a defendant who had pleaded guilty to mail theft to stand in front of a San Francisco post office wearing a sandwich board that read: "I stole mail. This is my punishment."[14] The condition was upheld on appeal.[14]

A San Francisco Chronicle columnist and reporter wrote in a commentary that Walker has an "aversion to harsh sentences for well-educated, well-heeled criminals and, in particular, perpetrators of securities fraud."[15]

On January 11, 2010, Walker began hearing arguments in Perry v. Brown. The case was a federal-constitutional challenge to California Proposition 8, a voter initiative constitutional amendment that eliminated the right of same sex couples to marry, a right which had previously been granted after the California Supreme Court found that Proposition 22 was unconstitutional.[23] On August 4, 2010, Walker ruled that Proposition 8 was unconstitutional "under both the Due Process and Equal Protection Clauses" and prohibited its enforcement.[24][25]

On April 25, 2011, supporters of Proposition 8 filed a motion in district court to vacate Walker's decision, citing Walker's own post-trial statement that he has been in a long-term relationship with another man. They argued he should have recused himself or disclosed his relationship status, and unless Walker "disavowed any interest in marrying his partner", he had "a direct personal interest in the outcome of the case."[26][27] District Court Judge James Ware heard arguments on the motion on June 13 and denied it the next day, writing that "the presumption that Judge Walker, by virtue of being in a same-sex relationship, had a desire to be married that rendered him incapable of making an impartial decision, is as warrantless as the presumption that a female judge is incapable of being impartial in a case in which women seek legal relief."[28][29] Legal experts noted that similar efforts to remove Hispanic judges from immigration cases or female judges from gender-discrimination cases have also failed in the past.[30]

^Geidner, Chris (April 16, 2010). "Breaking Barriers". Metro Weekly. Retrieved April 7, 2011. DuMont would only be the third known LGBT judge serving in the federal judiciary.... The others are U.S. District Court Judge Deborah Batts, who was nominated for her judgeship in 1994..., and U.S. District Court Judge Vaughn Walker, who sits in San Francisco and was not publicly known to be gay when nominated in 1989.

^Philip Shenon (January 14, 1988). "Battle Looming Over a Nominee For U.S. Court". The New York Times. Retrieved 2010-08-06. Mr. Walker, a 43-year-old partner at the law firm of Pillsbury, Madison & Sutro who has been active in Republican politics...

^Charlie Savage, James Risen (March 31, 2010). "Federal Judge Finds N.S.A. Wiretaps Were Illegal". New York Times. Retrieved 2010-04-26. A federal judge ruled Wednesday that the National Security Agency’s program of surveillance without warrants was illegal, rejecting the Obama administration’s effort to keep shrouded in secrecy one of the most disputed counterterrorism policies of former President George W. Bush.

^The San Francisco Chronicle reported that Walker's homosexuality was "the biggest open secret in the landmark trial over same-sex marriage." Those interviewed for the article said Walker had "never taken pains to disguise—or advertise—his [sexual] orientation" and they thought it would not influence his decision in the case.Phillip Matier and Andrew Ross (February 7, 2010). "Judge being gay a nonissue during Prop. 8 trial". San Francisco Chronicle. Retrieved 2011-02-08.